Back
Wednesday, Aug 10, 2016
Differences between Islamic and Conventional home financing
Type : Home Finance   |  Source : Gulf News Property Weekly 10/08/16

Islamic finance has necome a new trend in the global financial industry and home financing is no exception. 

 

The difference between Islamic and conventional home financing

Islamic

Conventional

Shariah guided

Human law guided

Lending on ethical principles

Lending on solely profit-oriented principles

Profit sharing based

Interest-based

Money not created through loan

Money created through loan

Asset-based

In home financing, property assets become collateral.

Seller/ buyer partnership

Lender/borrower relation

Only halal assets

Any asset/investment

No compound late payment penalty

Compound penalty is part of bank income

Foreclosures less likely

Foreclosures for payment default

No Currency speculation

Foreign currency loans available

Mortgage-reducing takaful

Life insurance compulsory

 

 

Please find differences at below link. 

http://alwaleedre.com/Newslink/Islamic%20Financing.png

Author : Arno Maierbrugger
Back

Mortgages